Positive Leadership Limited is a strategic leadership and corporate finance advisory firm. We use our considerable experience to provide unique perspectives and innovative solutions which help corporate leaders unlock maximum value from complex business challenges. There is no dress rehearsal for delivering answers to critical business challenges. When you are under intense pressure to succeed, we help deliver the vitally important marginal gains which let your business excel and win.

Friday, September 11, 2009

If you want to silence a room of executives, try this small trick. Ask them, "Why would anyone want to be led by you?" You will find that without fail the response is a sudden, stunned hush. All you can hear are knees knocking.

Executives have good reason to be scared. You can't do anything in business without followers, and followers in these "empowered" times are hard to find. So executives had better know what it takes to lead effectively—they must find ways to engage people and rouse their commitment to company goals. But most don't know how, and who can blame them?

In a recent interview with Management Today, former BBC Director-General Greg Dyke said the key to building up a high degree of trust and loyalty among employees is to make sure that they say the right things about you to others:

‘Leadership is about the stories that are told about you – both positive and negative’, he said. ‘You’ll be judged by those stories more than anything you say or write, and people will need to like what they hear about you. The most effective leaders are the ones who are loved by their staff. Always think as a leader: how will this be seen?’

His words echo those of the Wizard of Oz, who said ‘ A heart is not judged by how much you love; but by how much you are loved by others’.

In all but the smallest companies, it’s not possible for the CEO to develop a personal relationship with all employees, so instead they rely on internal communication (as well the informal networks of office rumours and gossip).

But is it really the job of communicators to present their Chief Exec as a loveable kind of guy? Or does that risk leading us to confuse popularity with success?

And therein lies the problem. It’s not a leader’s job to be liked; it’s their job to lead. Most CEOs are affable kind of people. Most are good communciators – they need to be so to have reached that position. But it doesn’t follow that they have to be the kind of person colleagues would be happy to go for a beer with.

In the introduction to the recent MacLeod Report on Employee Engagement, Peter Mandelson says ‘organisations that truly engage and inspire their employees produce world class levels of innovation’.

What inspires people is encouraging innovation and ideas in the workplace that are focused on competitive advantage or shared vision. That means engaging with colleagues and managers and bringing them along with you on a journey, communicating honestly and clearly.

Arguably, building a personal mythology for a leader could stifle rather than encourage innovation. After all, how many colleagues would be willing to challenge the Great and Powerful Oz?

Dyke’s job as the leader of a quasi-public sector organisation in the midst of bitter battle with senior government figures meant he slipped easily into the role of staunch defender of his organisation and his staff. But few other leaders are in such a position. Most answer to shareholders, or in the public sector, elected leaders, so simply presenting yourself as likeable is not a viable leadership communication strategy.

So while Greg Dyke inspired extraordinary loyalty from his staff, his strategy is not going to hold water for many others. Other leaders wishing to develop their own organisational profile need to communicate in the way that suits their organisation, their objectives, and their own leadership communication style.

Bill George is professor of management practice at Harvard Business School and author of 7 Lessons for Leading in Crisis, True North, and Authentic Leadership. The former chair and CEO of Medtronic, he currently serves on the boards of ExxonMobil and Goldman Sachs and previously, Novartis and Target. In March of 2009 he wrote an op-ed for the Wall Street Journal entitled, 7 Lessons for Leading in Crisis. Here are the (seven) reasons he thought this topic worthwhile:

'1) It is important to study leadership under fire. It’s easy to follow your True North – the internal compass of your beliefs, values, and principles that guide you through life – when times are easy. But when times are tough, leadership is tested, and I believe it is highly beneficial to profile the ways business leaders have resurged and triumphed under pressure.

2) Young leaders need a reality check. The next generation of leaders must understand the inherent vulnerability of leadership, particularly in crisis. CEOs occupy a precarious space in the world as they make tough decisions with far-reaching impact and face scrutiny at nearly every turn. I highlight this not to scare potential leaders, but to insure they assume their posts with the necessary principles and humility.

3) Successful people deserve praise. Leaders like Anne Mulcahy at Xerox, Greg Steinhafel at Target, Indra Nooyi at Pepsi, and Warren Buffett at Berkshire Hathaway deserve to have their principled leadership applauded. Leaders like Chuck Prince at Citigroup, Martin Sullivan at AIG, and Richard Fuld at Lehman Brothers likewise deserve to stand as cautionary tales. It’s crucial that we try to emulate examples of good leadership, while also recognizing and avoiding common temptations that steer towards poor leadership.

4) I’m a tinkerer. I’m an engineer at heart – graduated from Georgia Tech with a Bachelor’s in Industrial Engineering – so I like to know how things work.I wanted to explore the basic cultural tendencies driving leaders’ decision-making because I knew that certain core lessons could be drawn out that can inform our future behavior.

5) The record needs to be set straight, and the right lessons learned. As I say in the book’s introduction, the economic calamity of 2008-09 was not caused by subprime mortgages, credit default swaps, or even excessive greed. The root cause of the problem was failed leadership. Lessons in leadership are just as important as lessons in economics if we wish to avoid another economic collapse. The future harbingers of recession will look entirely different from credit default swaps and subprime mortgages, so the way to insure we do not over-leverage them again is to insure we have knowledgeable leaders at the helm.

6) The subject of crisis is timely. While showing progress, there is a great deal yet to be done if we want to pull America out of the economic doldrums. I hope this book can help those in charge to keep sight of their True North, and lead this country back to economic prosperity.

7) Legacies are made in troubled times. Overall, I wanted to convey a very important lesson. The good times do not define you. The tough times do. This was true of my career, and I am sure if you speak with my contemporaries, they will say the same. With every crisis comes opportunity to truly lead, and I wanted to make sure you dictate the terms of your legacy.'

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Graham Watson FRSA, LLB, CA is responsible for the advisory and consulting services provided to clients by Positive Leadership Limited (www.positiveleadership.co.uk). He has extensive international experience advising and consulting with organisations of all sizes; in business, sport and education. A qualified lawyer and chartered accountant; Graham is an experienced international investment banker and a trained mediator. Graham has been named a ‘Top 50 Leadership Expert to Follow on Twitter’ (www.twitter.com/posleadership). Previously he was a corporate finance partner with Deloitte, based in the UK and the USA (San Francisco). Graham is a founding member of the Scottish Enterprise backed GlobalScot organisation and he is Scotland's World Leadership Day Ambassador (www.worldleadershipday.org). Prior to establishing Positive Leadership, Graham was the executive director of Winning Scotland Foundation, a charity he co-founded with the goal of encouraging young Scots to develop a winning attitude through sport.

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